Economics

Motor City

As it happens, I was in Detroit this month. I went to see the art and the architecture, domains in which Detroit is still one of the richest cities in the United States. It’s broken, and it’s broke, and now it’s officially bankrupt too. But bankruptcy is actually a device for escaping from unpayable debt.

All over the world, Detroit’s bankruptcy is being used as an excuse to pore over what’s sometimes called “ruin porn”: pictures of the rotting, empty houses that still stand and the proud skyscrapers that have already been torn down. There’s even a self-guided tour of “the ruins of Detroit” available on the internet: people take a melancholy pleasure in contemplating the calamitous fall of a once-great city.

Two-thirds of Detroit’s population have fled in the past fifty years, but there were specific reasons why Detroit fell into decline, and there are also reasons to believe that it could flourish again – not as a major manufacturing centre, perhaps, but “major manufacturing centres” probably don’t have a bright long-term future anywhere. There are other ways to flourish, and Detroit has some valuable resources.

The events that triggered the city’s decline are well known. Large numbers of African-Americans from the southern states migrated to Detroit to meet the demand for factory workers during and after the Second World War. Being mostly unskilled, they started in the worst jobs – and even after they had acquired the skills, they stayed in low-paying jobs because of racial prejudice.

Spurned by the unions and victimised by a racist police force, they eventually rioted in the summer of 1967. Brutal policing made matters worse and hundreds were killed, but the worst consequence was the fear that the violence engendered. The great majority of the whites just left left town

I first went to Detroit a couple of months after the riots, and driving into the city the fear was actually visible. The traffic lights are spaced far apart on Woodward Avenue, and as each light turned green all the cars would accelerate away – and then, if the next light was still red, they would slow more and more until they were barely crawling, but they dared not stop for fear of being attacked.

Then, finally, the light would turn green, and they would race away through the intersection – only to go through the whole process again as they approached the next light. It was this unreasoning fear that caused the massive “white flight” to the suburbs and the hollowing out of Detroit.

The big automobile companies also took fright, and the new car plants were built elsewhere. As the jobs disappeared and the population dropped, the tax base fell even faster, for most of the people left behind in the city were poor or unemployed African-Americans. The city could no longer afford to provide good police or medical services, so even more people left.

This vicious circle has lasted half a century, exacerbated by much corruption and maladministration. This month’s declaration of bankruptcy is a brutal measure, for much of the debt being repudiated is the pensions of city employees, but it may give the city’s government enough leeway to begin rebuilding public services. If they are restored, much else could follow.

Let me explain what brought me to Detroit early this month. We were doing what we dubbed the “Rust Belt Art and Architecture Tour”: driving from Buffalo to Cleveland and then to Detroit, ending up in Chicago.

All these cities took a terrible beating as the industries they were built on died or moved overseas (except Chicago, which is “too big to fail”). But three generations ago, when they were the industrial heartland of the United States, they were very rich – at just the right time.

The first decades of the 20th century were the heyday of art deco, the most beautiful architectural style of the modern era. That was also the period when newly rich captains of industry could scoop up bucket-loads of new European and American art: impressionist, expressionist, abstract, the lot – and they lived mostly in what are now the Rust Belt cities.

So they put up dozens of art deco towers: the Guaranty Building in downtown Detroit is my candidate for the world’s most beautiful office building. They filled their homes with best of modern art – and, in the end, donated most of it to the local art galleries. Even in Detroit, where so much has been lost, more than half of those buildings are still there. So is all of the art.

Other cities would kill for these assets. In a post-industrial economy where people have more choice about where they live, they are assets that can actually attract population – especially since, in Detroit’s case, the people who left didn’t go far. Most of them are still out there in the suburbs that surround Detroit.

The city of Detroit’s population has fallen from 2 million to 700,000 over the past fifty years, but the metropolitan area’s population has stayed stable at around four and a half million for all of that time. The job, really, is to bridge the devastated middle ring of low-income Detroit housing and reconnect the outer suburbs with the city centre. Detroit can rise again. It just takes the right strategy.